ANALYSIS OF THE MERCATOR POLICY OPTIONS I-77 EXPRESS LANES August 15, 2018 I-77 Express Lanes | August 15, 2018
Agenda – Meeting #8 Introductions ▪ Review of options ▪ Secretary’s update ▪ Technical review ▪ Closing ▪ I-77 Express Lanes | August 15, 2018 2
Local Advisory Group Established in December 2017 with 12 members ▪ – Advise and provide input for the NCDOT Secretary Seven meetings to date ▪ – January 2018 through May 2018 Discussion topics ▪ – Project history and overview – Mercator options and associated pros and cons – Member feedback – Additional options for consideration I-77 Express Lanes | August 15, 2018 3
Mercator Policy Options Option A: Terminate the CA and complete the express lanes project using public funding or financing as it ▪ becomes available Option B: Terminate the CA and allow CRTPO to determine whether express lanes should remain in the transportation ▪ plan or be replaced or supplemented with other improvements based on available resources Option C: Negotiate modifications to the project scope and/or the terms of the CA, such as: ▪ - C-1 - Deferring or eliminating tolling of certain lanes - C-2 - Reducing the financial impact on local residents by establishing frequent user discounts or toll credits - C-3 - Revising the truck restrictions to allow larger vehicles that can use the express lanes safely - C-4 - Encouraging greater use of new capacity by allowing HOT2+ for some period of time - C-5 - Modifying the compensation provisions for unplanned revenue impacting facilities Option D: Work with CRTPO to identify and advance additional improvements to address mobility issues in the corridor ▪ Option E: Develop preliminary plans to negotiate and finance the purchase of the express lanes project after completion ▪ Option F: Complete and delete ▪ I-77 Express Lanes | August 15, 2018 4
Options Currently Under Evaluation Options Discussed Summary of Local Advisory Group Input Negotiate contract modification - defer or eliminate tolling of Option C-1 Evaluate costs to convert to 3 GP lanes and 1 EL between exits 23 and 28. certain lanes Negotiate contract modification - frequent user discounts or Potential benefits and costs of discounts can be better evaluated after initial operating Option C-2 toll credits data is available. Consider modifications to truck restrictions based on project performance. Evaluate Option C-3 Negotiate contract modification - allow medium trucks potential toll rates and revenue impact. Negotiate contract modification - change compensation Determine what potential improvements within the airspace are desirable and feasible Option C-5 provision for unplanned revenue impacting facilities over next 10 years and evaluate potential compensation cost, if any. Develop preliminary plans to negotiate and finance the Evaluate legal and financial aspects associated with assuming existing project debt and Option E purchase of the express lanes project after completion financing termination costs. Evaluate legal and financial aspects associated with financing termination costs and Option F Complete and delete expediting regulatory approvals. Run cars on the shoulder during peak hours where Option G* Identify potential locations and travel time benefits; evaluate costs and schedule. opportunities exist Evaluate potential costs and schedule - build a third GP lane in each direction between Option H* Add more capacity (non-tolled) over the causeway exits 28 and 36. Evaluate potential costs and schedule - convert to 3 GP lane and 1 EL between exits 23 Option I* Maintain 3 GP lanes throughout project and 28 and build a third GP lane in each direction between exits 28 and 36 (combination of Options C-1 and H). Note: Information presented here is a summary of feedback provided by LAG. These *Additional Options Suggested by LAG comments do not necessarily represent the opinions or policies of NCDOT or NCTA. I-77 Express Lanes | August 15, 2018 5
Based on input from the May 10, 2018 Local Advisory Group meeting, the following options are not being evaluated at this time Options Discussed Summary of Local Advisory Group Input Terminate the CA and complete the express lanes project Significant cost and schedule impacts; similar outcome can be pursued after completion Option A using public funding or financing as it becomes available of construction. Terminate the CA and develop alternative through CRTPO Significant cost; uncertain when alternative improvements can be identified, funded, and Option B processes completed. Negotiate contract modification - HOT2+ for some period of Consider changing HOT3+ to HOT2+ based on project performance and usage. Evaluate Option C-4 time potential toll rates and revenue impacts of this change. Work with CRTPO to identify and advance additional Option D Option is currently available and does not require NCDOT resources. improvements to address mobility issues in the corridor Note: Information presented here is a summary of feedback provided by LAG. These comments do not necessarily represent the opinions or policies of NCDOT or NCTA. I-77 Express Lanes | August 15, 2018 6
Secretary Jim Trogdon 7
Options Evaluated with Hypothetical STI Statewide Scores Estimated Cost Hypothetical Option Score + Impacts Convert 1 EL to GP lane (change from 2+2 to 3+1) exit 23 to 28 and convert 1 EL to C-1 $400M 50-55 GP lane (change from 2+1 to 3+0) exit 28 to 36 E $392M-$623M* 45-50 Purchase the contract and keep express lanes as planned F Purchase the contract and convert all EL to GP lane $540M-$771M** 45-50 H Add 1 GP lane (change from 2+1 to 3+1) exit 28 to 36 $350M-$600M 70-75 Convert 1 EL to GP lane (change from 2+2 to 3+1) exit 23 to 28 and add 1 GP lane I $550M-$800M 70-75 (change from 2+1 to 3+1) exit 28 to 36 $40M J Add auxiliary lane exit 23 to 25; exit 25-28; or exit 33-35 (scored by segment) 60-65 (each segment) Note: P5.0 score for I-77 South is 89 and for I-77 North is 85. +Actual score is dependent on competition against other projects and availability of funding at the time of prioritization/ranking. *Does not include demobilization costs, breakage costs, or additional allowable costs. **Includes $86M of BA Payback. I-77 Express Lanes | August 15, 2018 8
Main Objective Ultimately, the State of North Carolina will Operate this Facility How Do We Get There? Improve, Expand and Protect I-77 Express Lanes | August 15, 2018 9
Improve, Expand and Protect Plan Improve • Negotiate better terms for drivers: – Toll caps (option C-2-2) – Frequent user discounts (option C-2-1) – Allow medium size trucks use of express lanes capacity (option C-3) I-77 Express Lanes | August 15, 2018 10
Improve, Expand and Protect Plan Expand • Work to expand non-toll capacity options being pursued – Harden shoulders during peak periods (option G) – Convert one express lane to a general purpose lane (3+1) exit 23-28 and add one general purpose lane (3+1) exit 28-36 (option I) – Develop and implement a process to continually evaluate contract purchase under Strategic Transportation Investments (required process to reach goal of operating facility) (option E) – Add auxiliary lanes exit 23-25, 25-28 and 33-35 (option J) I-77 Express Lanes | August 15, 2018 11
Improve, Expand and Protect Plan Protect • Operate in an open and transparent process to ensure North Carolinians have an opportunity to participate BEFORE decisions are final • Ensure options are legal and fiscally responsible • Work on multiple solutions simultaneously until the most effective and efficient solution is completed to ensure results • Continue to engage the I-77 Local Advisory Group regarding this plan I-77 Express Lanes | August 15, 2018 12
Constraints • Strategic Transportation Investments (STI) Law – Requires projects be scored based on data and then be prioritized for funding • State Law (2018 Budget – Senate Bill 99) – Requires NCDOT to report any proposed contract modifications or cancellations to the NC General Assembly at least 60 days in advance – Defines impacts to funding for other projects as it relates to the bonus allocation and project (corridor) cap • Existing contract – New or modified construction will require design time/possible permitting – Contract modifications must be negotiated I-77 Express Lanes | August 15, 2018 13
Summary • Improve – Negotiate better terms for drivers • Expand – Work to expand non-toll capacity options being pursued • Protect – Continue to engage the public in an open and transparent manner I-77 Express Lanes | August 15, 2018 14
TECHNICAL REVIEW I-77 Express Lanes | August 15, 2018
Improve Negotiate Better Terms for Drivers Frequent user discounts ▪ – Typically, presented as discount or credit to users who meet a given criteria – Actual discount amount, timeframe for discount and specific criteria for potential discount are subject to negotiation with the Developer Toll caps ▪ – Limits the maximum toll a user would pay to travel the corridor – Initial toll cap and annual increase of toll cap are subject to negotiation with the Developer Allow medium trucks ▪ – Current contract does not allow vehicles with more than two axles – Type and length of allowed trucks as well as toll rate differential are subject to negotiation with the Developer I-77 Express Lanes | August 15, 2018 16
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